$57.00
$110.00
bear $57.00
base $86.00
bull $110.00
margin of safety $50.00
market price* $106.05
United States Lime & Minerals quarries limestone and turns it into quicklime, hydrated lime, lime slurry, pulverized limestone and aggregate at plants in Texas (Cleburne), Arkansas (Batesville, with the Love Hollow quarry), Oklahoma (St. Clair and Mill Creek), Missouri (Carthage) and Colorado (Delta). Lime is heavy and cheap to make relative to the cost of hauling it, so each plant serves customers within roughly 400 miles, and a new competitor needs a permitted quarry of high-purity limestone plus kilns costing tens of millions of dollars. About 675 customers buy from the company: highway, road and building contractors (including recent large data-center projects), steel makers, water and sewage treatment plants, power plants using lime to clean flue gas, paper and glass makers, roof-shingle manufacturers, poultry producers and oil and gas service firms. No customer is more than 10% of sales. The company has no debt. What the business earns. We measure the cash the owners could take out each year: operating cash flow, minus timing swings in working capital, minus stock compensation (a real cost), minus the capital spending needed to keep the plants running. Spending that funds growth is separated out using the company's own ten-year average of capital spending to sales. On that basis owner earnings per share (adjusted for the 2024 five-for-one split) were about $0.65 in 2016, $1.34 in 2020, $1.78 in 2022, $2.47 in 2023, $3.84 in 2024 and $3.68 in 2025. Two adjustments matter for valuation. First, the company earned about $13 million of interest in 2025 on its cash pile; because we add the cash itself to the value separately, we remove that interest income (after tax) from the yearly earnings so it is not counted twice. That leaves business cash flow of about $2.26 per share in 2023, $3.53 in 2024 and $3.32 in 2025. Second, 2025 is held down by spending on the new vertical kiln at Texas Lime (about $65 million in total, $37.3 million paid through 2025, start-up expected summer 2026); our method treats most of that as upkeep spending, which makes 2025 look weaker than the operations were. Operating income actually rose 26% in 2025 on an 11.7% rise in volumes and a 5.6% rise in prices. The starting point. Lime prices reset sharply higher from 2022 to 2024 (prices rose 14.2% in 2024 alone) and have held and kept rising since, while fuel costs eased, lifting operating margins from around 20% before 2021 to over 40% in 2025. Years before 2023 describe a much lower-priced business, so we use the middle of 2023 to 2025: about $3.32 per share of business cash flow, roughly $95 million a year. The first half of 2026 supports that the level is holding: operating income was $76.4 million against $75.6 million a year earlier, with a weak first quarter (the January winter storm and soft roof-shingle demand) offset by a strong second quarter (revenue up 8.3% on construction and steel volumes). Business cash flow per share fell about 6% in 2025; we assume no growth in 2026, and only allow 2027 to return to the $3.55 level already reached in 2024 because the specific cause of the 2025 dip, the Texas kiln spending, ends once the kiln starts up this year. How long it lasts. The company reports enough limestone at the Texas Lime quarry for about 70 years and at Love Hollow for more than 80 years at current production. Lime is consumed in steelmaking, water treatment, road building and pollution control with no practical substitute, and the company has sold it through every cycle for decades. On that evidence we carry earnings flat out to about 2085 in every case, and assign nothing after that. All cash flows are discounted at 6%. Base case, about $86 per share. Earnings hold at $3.32 in 2026 and return to $3.55 in 2027, then grow 3% a year through 2035 and 1.5% a year through 2045 before leveling off. The growth credited is volume from the company's long record of adding and upgrading kilns from its own cash, in small steps, every few years (the St. Clair vertical kiln, Texas slurry, the Mill Creek and Carthage tuck-ins, and now the Texas kiln, already paid for), with prices only keeping pace with costs. We do not credit further margin gains, data-center demand beyond what is already in the numbers, or new markets. The business is worth about $73 per share; it owes nothing; adding $12.95 per share of cash (the $402.6 million on hand at June 30, 2026 less about $30 million kept for operations) gives about $86. Bear case, about $57 per share. Named risks the company itself discloses combine: a construction slowdown in Texas and the surrounding states, continued weakness in roof-shingle demand that began in late 2025, retirement of coal-fired power plants that buy lime for flue-gas treatment, softer oil and gas drilling, and fuel costs rising back up. Because profits are very sensitive to volume, price and cost, earnings drop to about $2.20 per share by 2028 (roughly the 2023 level, when prices were about 14% lower), recover only to about $2.65 by 2031, and grow 1% a year to 2036 before flattening. The business is worth about $44; with no debt and $12.95 of cash, about $57. Even this case leaves no lender with a claim ahead of shareholders. Bull case, about $110 per share. The Texas kiln starts on schedule and its added output sells into continued Texas highway and data-center construction and steel demand, upkeep spending falls back to its pre-project level, and earnings reach about $3.90 per share in 2027, grow 5% a year through 2035 and 3% a year through 2045. The business is worth about $97, plus $12.95 of cash, about $110. What could make this wrong. The single most important assumption is that today's prices and margins hold. Margins more than doubled in three years; if the regional producers stop pricing with discipline, or energy costs spike again without being passed through, earnings could fall toward the pre-2022 level of $1.20 to $1.80 per share, below our bear case. In the other direction, the base case gives no credit to a possible large acquisition financed from the cash. The company has not disclosed how much output the new Texas kiln adds, so we have not credited any specific volume from it in the base case. Margin-of-safety price. The margin-of-safety price is about $50 per share, where a 20% yearly return is supported by the cases. From $50, if the market comes to value the business near our base case within three to four years (by then about $100 to $108 with growth and accumulated cash), the base case implies roughly 20% to 25% a year; if the bear case unfolds, the shares still represent a debt-free business worth more than that price, and the bear case implies a mid-to-high single-digit return rather than a loss. We set the price somewhat above the bear case because the downside is cushioned by about $13 of cash per share and no debt, but well below the base case because the current high-margin level has only three years of history. Change since our previous analysis. Our earlier estimate (bear $40, base $75, bull $119, margin-of-safety price $45) used different discount rates for each case and simple growth percentages. We now discount every case at the same 6% rate, build each case from named drivers, remove interest earned on cash from yearly earnings while adding the cash separately, and start from the 2023 to 2025 level rather than a three-year average that included the weaker 2023 alone with no adjustment for kiln spending. That raises the bear and base cases, lowers the bull case, and moves the margin-of-safety price to $50.